FCC said to consider scrapping concept of 'net neutrality'

By Todd Shields Bloomberg News

Posted:
04/23/2014 04:00:53 PM PDT

Updated:
04/23/2014 05:11:49 PM PDT

A U.S. regulator is considering letting Internet-service providers negotiate payments from the likes of Amazon and Google for access to the so- called last mile of connection to customers, an official said.

The proposal by Federal Communications Commission Chairman Tom Wheeler is to go before the five-member agency for a preliminary vote next month, he said at a news conference Wednesday in Washington, D.C., without providing details.

Service providers such as AT&T and Verizon Communications and cable companies could negotiate with content providers, so long as the result is commercially reasonable, said the FCC official who asked not to be identified because the proposal hasn't been made public.

The agency wants to know whether fees-for-access arrangements would be considered to be commercially reasonable, the person said in an emailed statement.

The FCC has been seeking to replace a rule voided in January by a U.S. court that has come to be commonly known as "net neutrality." The regulation required companies that provide businesses and consumers high-speed Internet service over wires, or broadband, to treat all Web traffic equally and didn't let them charge for faster or more-reliable access.

Michael Weinberg, vice president of the policy group Public Knowledge, said Wheeler's proposal "is not net neutrality." The FCC is inviting service providers "to pick winners and losers," Weinberg said in an e-mailed statement.

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AT&T in a March 21 filing said the agency should give Internet-service providers the flexibility to negotiate with companies that provide video and other content over the Web, provided the result isn't commercially unreasonable. Verizon in a filing March 21 said the agency shouldn't write prescriptive rules and should instead intervene as needed to address practices that "demonstrably harm" consumers and competition.

Proponents of rules, including Web companies, have said regulations are needed to keep Internet-service providers from interfering with rival video and other services.

The White House in February backed an online petition asking the FCC to regulate service providers to promote open Internet provisions.

"Absent net neutrality, the Internet could turn into a high-priced private toll road that would be inaccessible to the next generation of visionaries," Gene Sperling, then-director of the National Economic Council, and Todd Park, U.S. chief technology officer, said in a Feb. 18 blog post.

Bulk connection agreements like one Netflix struck with cable provider Comcast in February aren't considered to be among issues to be addressed by open-Internet rules, Wheeler said at a March 31 news conference. Netflix agreed to pay Comcast millions of dollars annually to ensure improved speed and reliability for its video service.

Netflix Chief Executive Officer Reed Hastings in March criticized Comcast, Verizon and others for trying to charge online TV providers to deliver shows over their networks. Hastings called for rules that would prevent Internet service providers from extracting a toll to deliver shows such as "House of Cards" over their networks.

As it acquired NBCUniversal in 2011, Comcast agreed to abide by the FCC's net-neutrality rules until 2018. The agreement remains in force, and Comcast has said it will be extended to subscribers brought to it as part of its proposed purchase of second-largest U.S. cable provider Time Warner Cable Inc. The combined company will have about 30 million subscribers, according to Comcast.